A growing sidecar interest – April 3, 2006

April 3, 2006

Although attendance at the 34th annual Griffith Park Sidecar Rally — the nation’s premier sidecar event — was up by 5 percent to 8,000 visitors last year, three-wheeled motorcycles have spent the past few decades relegated to boutique status, viewed as unique vehicles operated by a dedicated breed of rider.
Offering what it touts as the world’s only production sidecar with a drive wheel, Russian motorcycle manufacturer Ural now is trying to change that perception, in part by marketing its product as a Sports Utility Motorcycle (SUM) designed for on-road and off-road enthusiasts seeking increased carrying capacity and stability.
Ural motorcycles are imported to the United States and Canada by factory subsidiary Irbit MotorWorks, LLC, Redmond, Wash. Irbit has 12 employees who operate in 8,500 sq. ft. of warehouse and office space. The firm plans to have an East Coast warehouse open by July 1.
“There seems to be an increasing interest in sidecars, and we have a unique product that has almost no competition and is showing intensive growth in sales and popularity,” Irbit Vice President of Market and Sales Madina Merzhoyeva told Powersports Business. “The rise in visitors to the Griffith Park Rally was a good sign, but 66 percent growth in sales of Ural sidecar motorcycles in 2005 is even a stronger indication of the expanding segment.”
Currently retailed by 56 dealers in North America, Ural sold 550 units here last year — the highest number in its 10-year history of importation to the United States. Worldwide sales in 2005 numbered 1,900 units, down from 2,100 units in 2004. “But almost 1,200 bikes went to Iraq in 2004 under a deal with the United Nations, so we did see major growth in 2005,” Merzhoyeva said.
This year, Ural again plans to sell 2,100 units — 850 units in North America, 670 units in Europe and approximately 600 units throughout the remainder of the world. Annual factory output capacity is 3,000 units.
Ural’s Patrol (MSRP $9,795) and Gear Up ($10,595) represent the company’s SUM line of products. Sales of these two models tripled from 2004 to 2005, making up 54 percent of sales for the year. Other models include the Tourist ($8,595), the most affordable model with a leading link front fork; Troyka ($9,695), a deluxe version with telescopic front forks, distinctive two-paint color schemes and luxury sidecar; and Retro ($10,495), the most classic looking motorcycle of the line.HISTORY
Ural has produced more than 3.2 million cumulative machines since it was founded in 1939, when, as legend has it, the first prototype was built based on reverse engineering of a BMW R71.
The first version of Ural motorcycle, called the M72, was sent to battle in World War II in 1942. To protect the factory from bombing campaigns, it soon was moved from Moscow to the small town of Irbit, located on the fringe of the vast Siberian steppes in the Ural Mountains. After the war, the Ural factory was renovated and continued production of the motorcycles for civilian purposes.
Production peaked in 1992, when 130,000 units rolled off the factory floor. But when Russia moved to a market economy, the domestic market disappeared and, in 2000, production fell to less than 2,000 units. That winter, unable to pay the bills, the factory was shut down and sold via management buyout to three entrepreneurs: former motorcycle racer Vladimir Yudin and his business partners Dmitry Lebedinskiy and Ilya Khait.
Yudin oversees business at the factory in Irbit, Lebedinskiy handles most international markets from a Moscow office, and Khait focuses his efforts on U.S. market development.
Merzhoyeva said the new owners took the time to consolidate operations and the factory underwent significant restructuring and downsizing. She said two-thirds of the personnel were laid off; the power plant, foundry, stamping mill and other buildings were sold or shut down; equipment was moved to two smaller buildings and new production lines were set up; and the gigantic paint lines were scavenged to make a new single line of much smaller capacity. Meetings were held by candlelight and diesel generators were used to produce enough power to communicate with suppliers and customers.
“The challenge of taking a Soviet-style super-factory and turning it into a workable scaled-down facility that could emphasize quality over quantity required a new vision and a new mind-set,” she said.
Unable to make many rubels in Ural’s home market, the new owners re-launched production in 2002 and targeted sales in Europe and the United States.
It was at that time that Ural replaced independent distributors with its own subsidiary distribution companies. At the time, Ural motorcycles were distributed in the United States by Classic Motorcycle and Sidecar, Inc. (CMSI), Preston, Wash. Ural replaced CMSI with Irbit MotorWorks of America, Inc.
The first shipment of new Urals was delivered to U.S. dealers in August 2003. Designed with input from Ural enthusiasts worldwide and carrying a two-year parts, labor and unlimited mileage warranty, the new 50-state legal bikes came with a front Brembo disc brake, a Keihin carburetor, Denso alternator, Domino controllers and Paioli front forks. Although the look of the motorcycles has not changed much, dozens of small upgrades are being introduced every year to improve overall finish and performance of the motorcycles, Merzhoyeva said. She said Irbit will match a dealer’s shop rate for warranty repairs.FUTURE
“Our current primary focus is promotion of the Ural brand on a national level and strengthening the dealer network,” said Merzhoyeva. “There are areas where Ural still lacks dealer representation, and so we’re mainly looking for dealers in Ohio, Indiana, Illinois, Massachusetts, New Hampshire, New York, Florida and Georgia. We don’t expect to exceed 100 dealers in the next five years, but that’s by design because we want to remain efficient.”
She said the average Ural dealer is a small to mid-size retailer that is professionally managed, technically savvy, and hosts customers interested in adventure, dual sport and family recreation.
“These are dealers not focused on moving high volume of product, but rather smaller volumes with healthy margins,” she said. “The average dealer will sell about 12 Urals per year, but the more successful will sell 30 to 40 per year.”
For more information about Ural motorcycles, visit www.ural.com. To learn more about the sidecar industry and other sidecar suppliers, visit www.sidecar-industry.com.